Leading Senator Urges Congress Not To Pass New Crypto Reporting In Infrastructure Bill
Today, Ranking Member Pat Toomey (R-PA) of the Senate Banking Committee issued a press release through the Committee urging Congress not to move forward with new cryptocurrency information reporting text of the infrastructure bill. Calling the language ‘unworkable’, he proclaimed that he would be offering an amendment to fix it. A portion of the Infrastructure bill applying to cryptocurrency tax reporting had come under scrutiny late last week with respect to some unintended and far-reaching consequences to the way the language was written.
Toomey stated, “Congress should not rush forward with this hastily-designed tax reporting regime for cryptocurrency, especially without a full understanding of the consequences.” The language regarding the cryptocurrency tax reporting could be the first law in the U.S. and its inclusion in a ‘must-pass’ infrastructure bill raised flags regarding how quickly this policy might have been constructed.
Toomey focused on what many critics have been pointing out regarding the definition given for a ‘broker’ as it relates to IRS reporting (not as a broker specific to securities). “By including an overly broad definition of broker, the current provision sweeps in non-financial intermediaries like miners, network validators, and other service providers.” In cryptocurrency, the Bitcoin miners or in other blockchain networks, the validators, are compensated ‘block rewards’ as well as ‘fees’ for confirming transactions in the network.
“Moreover, these individuals never take control of a consumer’s assets and don’t even have the personal-identifying information needed to file a 1099 with the IRS,” said Toomey regarding the nature of the activities miners conduct and how the technology simply does not permit the ability to obtain personal-identifying information.
Toomey concluded his remarks by noting that, “Simply put, the text is unworkable. I plan to offer an amendment to fix it.” The full text of the press release is available here.